U.S. Securities and Exchange Commission

LITIGATION RELEASE NO. 18746 / June 16, 2004

SEC CHARGES HUSBAND OF LAW FIRM SECRETARY WITH INSIDER TRADING, ALONG WITH NEW JERSEY BUSINESSMAN AND FORMER NEW JERSEY POLITICAL FIGURE

The Securities and Exchange Commission ("Commission") today filed a complaint in the United States District Court for the Southern District of New York alleging that Fiore J. Gallucci, Ronald A. Manzo, and Gary B. Taffet engaged in repeated instances of insider tipping and trading involving the securities of several companies ahead of public announcements that the companies were targets in contemplated business combinations. The Commission alleges that Gallucci, Manzo, and Taffet, through their insider tipping and trading, each violated Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b 5 and 14e 3 thereunder. The Commission seeks a final judgment ordering the defendants to disgorge all illegal profits, including those of their tippees, with prejudgment interest thereon; imposing civil money penalties; and enjoining each of the defendants from future violations of Sections 10(b) and 14(e) of the Exchange Act and Rules 10b 5 and 14e 3 thereunder.

The Commission's complaint alleges that, at various times during 1998 and 1999, Gallucci, at the time a bond salesman, learned the identities of the target companies from his wife, a secretary for a senior mergers and acquisitions partner at the law firm of Skadden Arps Slate Meagher & Flom ("Skadden Arps") in New York. Skadden Arps represented a company in connection with each of these contemplated business combinations, and Gallucci's wife learned the target companies' identities in the course of her employment. The complaint alleges that she disclosed the information to Gallucci only after he expressly assured her that he would not disclose it to others or use it for trading purposes. The complaint also alleges that, although Gallucci himself did not trade on the basis of the information, he did misappropriate it from his wife by disclosing it and its source to Manzo, his long-time friend and owner of a New Jersey insurance company that did business with local government entities in New Jersey. Manzo purchased securities of the target companies, garnering illegal profits of more than $900,000. The complaint further alleges that, in addition, Manzo tipped a friend, Taffet, who was an owner of a company that provided insurance advice to local government entities in New Jersey and who had strong political ties in the state. Taffet purchased securities of several of the target companies, resulting in illegal profits of approximately $247,000. The complaint also alleges that Manzo and Taffet each tipped other individuals who themselves traded on the basis of those tips, and one of those individuals tipped two others, who also traded. The total additional illicit profits from these direct and indirect tippees is approximately $1.8 million.

The Commission's investigation is continuing. The Commission acknowledges the assistance and cooperation of the New York Stock Exchange, the American Stock Exchange, and the Office of the United States Attorney for the Southern District of New York.